Inflation Ahead?

There are rumors that the world will drop the dollar as the global currency. What does that mean to you? Instead of using dollars to buy oil, the U.S. will have to exchange the dollar for other currencies. With China owning $2 trillion dollars, and the oil exporting holding another $2 trillion, don't expect a quick move (some say the switch will occur in nine years). But what are they going to do with the dollars? If they dump them, the value of the dollar decrease and all imports (like oil) will increase. This will result in inflation in the U.S.

Why would they do this? Because they a see a country going deeper to debt and spending beyond in means. The porkulus bill, health-care, cap-and-trade are all hurting the U.S. The question is whether the U.S. can increase non-agricultural exports significantly given a cheaper dollar.

Of course the enemies of the U.S. favor this. As the U.S. goes deeper into debt it will have to stop defending the world, giving them greater opportunities to cause mischief / expand influence. The extreme-right and extreme-left will demand the retreat of the military all around the world. Of course this will be followed by reducing aid to countries, and eventually possibly retreating to an isolationist policy.